The impact of this year can still be seen worldwide up until today. It’s a global crisis that has left thousands of people either out of jobs or out of business, struggling to make ends meet as each day passes.
As a result, it has been incredibly challenging for homeowners to manage their home loans and pay for their mortgages. Fortunately, if you are eligible for a Veterans Affairs (VA) loan, you can receive significant financial relief in this time of crisis.
A VA loan can be useful for people who have recently lost their jobs, received a reduced salary, are nursing a health issue, or other reasons brought about by the pandemic. It approves you of a twelve-month forbearance as well!
Keep reading below to find out more information about how having a VA loan can provide relief during these times.
The Importance of Forbearance
The law states that homeowners that are currently paying for their mortgages, and those whose loans are insured by the VA, can become candidates for forbearance. The coverage lasts for six months and can be extended up to one year, only if you legally request an extension.
Depending on your provider, you can expect to achieve a three-month forbearance period, but federal law allows a year of mortgage relief. If you’re unsure about your rights, you can seek the help of a professional to help you handle a defaulted loan accordingly.
In the event of an unexpected natural disaster such as this time, the VA recommends servicers to extend their help towards homeowners in need. If you can’t meet the due date and will need more time to pay your mortgage loan accordingly, you can receive an extended forbearance under the CARES Act, if a first or subordinate lien backs up your loan.
Applying for Forbearance
You can apply for forbearance by filing a request to your mortgage company during these unprecedented times and letting them know that you’re experiencing financial issues. Once you show them proof, they won’t have to require additional evidence to strengthen your case and will advance with processing your request.
When you’re approved for forbearance, your servicer is prohibited from adding fees or penalties to your account. In addition, they aren’t allowed to increase the interest and have it exceed beyond the amount you previously decided on!
The Coverage of Forbearance
Even though the CARES Act doesn’t exactly indicate the covered period for asking for a forbearance, it’s essential to request it no later than December 31, 2020. Any time after that will be rendered useless, as that’s when the USA’s declaration for this year’s national emergency will be terminated!
Moreover, if you’re planning to ask for an extension of your current forbearance period, it would be best to request it even before your original comes to a close. Doing so helps you avoid encountering problems that could end up with you losing the possibility to prolong your forbearance loan and help provide financial relief for your mortgage.
Los Angeles VA Loans Expert: Shannon Christenot
Applying for forbearance helps homeowners achieve monetary assistance when they come across issues that could significantly affect their VA home loan. Even without the pandemic, you can still expect to rely on a loan forbearance because the government appoints mortgage lenders supported by the state to continue transacting with qualified home buyers and make the loan process easier for you. Are you looking for a mortgage broker in Los Angeles to help you manage your loans and debts? Shannon Christenot is the number one mortgage lender in LA that offers various loans, including conventional, FHA, VA, USDA, reverse mortgages, and more. Get in touch with us today at (818) 601-2231 to receive a free mortgage rate quote!